UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________

Form 8-K
______________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): August 6, 2020

The Joint Corp.
(Exact Name of Registrant as Specified in Charter)

Delaware001-3672490-0544160
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

16767 N. Perimeter Drive, Suite 110
Scottsdale, AZ 85260
(Address of Principal Executive Offices)

Registrant's telephone number, including area code:
(480) 245-5960

 
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 [   ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [   ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [   ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [   ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 Par Value Per ShareJYNTThe NASDAQ Capital Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 
 

Item 2.02. Results of Operations and Financial Condition.

On August 6, 2020, The Joint Corp. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2020. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished in this Item 2.02 and Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

The Company is posting an earnings presentation to its website at https://ir.thejoint.com/. A copy of the earnings presentation is being furnished herewith as Exhibit 99.2. The Company will use the earnings presentation during its earnings conference call on August 6, 2020 and also may use the earnings presentation from time to time in conversations with analysts, investors and others.

The information furnished in this Item 7.01 and Exhibit 99.2 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

The information contained in Exhibit 99.2 is summary information that is intended to be considered in the context of the Company’s filings with the SEC. The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number Description
   
99.1 Press Release dated August 6, 2020   
99.2 The Joint Corp. Earnings Presentation, August 2020


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 The Joint Corp.
   
   
Date: August 6, 2020By: /s/ Peter D. Holt        
  Name: Peter D. Holt
  Title: President and Chief Executive Officer
  

EdgarFiling

EXHIBIT 99.1

The Joint Corp. Reports Second Quarter 2020 Financial Results

- Grows Revenue 13%, Compared to Q2 2019 - 
- Increases Total Clinic Count to 539, Opening 13 Clinics in Q2 2020 - 
- Sells 11 Franchise Licenses in Q2 2020 -

SCOTTSDALE, Ariz., Aug. 06, 2020 (GLOBE NEWSWIRE) -- The Joint Corp. (NASDAQ: JYNT), a national operator, manager and franchisor of chiropractic clinics, reported its financial results for the quarter and six months ended June 30, 2020.

Second Quarter Financial Highlights: 2020 Compared to 2019

Operating Achievements Highlights

“Our solid financial performance in the second quarter of 2020 was driven by strong clinic operations, clinic openings and franchise license sales, demonstrating the resiliency of our business model especially in light of the COVID-19 pandemic,” said Peter D. Holt, President and Chief Executive Officer of The Joint Corp. “We provide convenient, affordable chiropractic care, which our patients validate as an essential healthcare service. The need for pain relief - particularly in a natural, holistic way - continues to grow. Our strategy to expand the market through retail clinics continues to build our brand, increase the awareness of chiropractic care and attract new patients. A recent marketing initiative successfully reengaged frozen memberships. A second promotion welcomed new patients, at no charge for their initial visit, resulting in converting those patients to packages and memberships at record levels.”

“Our franchise growth shows the strength of our value proposition. In 2020 through the end of July, we sold 49 franchise licenses and opened 37 clinics, which is both remarkable during this pandemic and indicative of the positive outlook of our business. We remain confident in our ability to adapt, to serve and to grow in this unique environment. We continue to march toward our target of opening 1,000 clinics by the end of 2023. To achieve our goal, we will focus on opening more greenfield clinics to complement franchised clinic growth. Our resilient hybrid business model remains a foundation for long-term growth and shareholder value.”

Financial Results for the Three Months Ended June 30: 2020 Compared to 2019

Revenue was $12.6 million in the second quarter of 2020, compared to $11.2 million in the second quarter of 2019, reflecting a greater number of clinics, which was partially offset by the impact of the pandemic.

Cost of revenue was $1.4 million, compared to $1.3 million in the second quarter of 2019. The increase was in line with the total increase in franchise sales and reflective of higher regional developer royalties and commissions.

Selling and marketing expenses were $1.8 million for both periods, reflecting the timing of advertising spending. General and administrative expenses were $8.5 million, compared to $7.2 million in the second quarter of 2019, primarily due to an increase in payroll and related expenses to support revenue growth and increased clinic count. The company continued to operate its corporate clinics and headquarters without any furloughs or lay-offs while working to increase sanitary measures to ensure patient and employee safety.

Net income was $116,000, or $0.01 per diluted share, compared to $462,000, or $0.03 per diluted share, in the second quarter of 2019.

Adjusted EBITDA was $1.1 million for both periods. The company defines Adjusted EBITDA, a non-GAAP measure, as EBITDA before acquisition-related expenses, bargain purchase gain, net gain/(loss) on disposition or impairment, and stock-based compensation expenses. The company defines EBITDA as net income/(loss) before net interest, tax expense, depreciation, and amortization expenses.

Financial Results for the Six Months Ended June 30: 2020 Compared to 2019

Revenue was $26.2 million in the first six months of 2020, increasing 20% compared to $21.8 million in the same period of 2019. This increase reflects a greater number of clinics and increased gross sales at both franchised and company-owned or managed clinics during the first quarter, which was partially offset by the negative impact of the pandemic during the second quarter.

Net income was $931,000, or $0.06 per diluted share, compared to $1.4 million, or $0.10 per diluted share, in the first six months of 2019.

Adjusted EBITDA was $2.8 million, compared to $2.6 million in the first six months of 2019.

Balance Sheet Liquidity
Unrestricted cash was $14.6 million at June 30, 2020, compared to $8.5 million at December 31, 2019, reflecting $2.7 million borrowed under the CARES Act U.S. Small Business Administration Payroll Protection Program, $2.0 million drawn on a revolving line of credit and $3.0 million in cash flow from operations. The increased liquidity enhances the company’s ability to maintain payroll and manage disruptions caused by the COVID-19 pandemic.

2020 Guidance for Financial Results and Clinic Openings Withdrawn
As announced on March 20, 2020, given the uncertainties of the potential impact from the COVID-19 pandemic, the company withdrew its 2020 financial and clinic opening guidance. The company is not providing an update at this time.

Conference Call
The Joint Corp. management will host a conference call at 5 p.m. ET on Thursday, August 6, 2020, to discuss the second quarter 2020 results. To gain immediate access to the call, bypass the operator and avoid the queue, you may preregister by clicking here. Upon registering, you will be emailed a dial-in number, direct passcode and unique PIN. Those who prefer to call-in directly, may do so approximately 20 minutes prior to the start time by dialing 706-643-5902 or 888-869-1189 and using reference code 3190497. The accompanying slide presentation will be in the IR section of the website under Presentations and in Events. A live webcast of the conference call will also be available on the IR section of the company’s website at https://ir.thejoint.com/events. An audio replay will be available two hours after the conclusion of the call through August 13, 2020. The replay can be accessed by dialing 404-537-3406 or 855-859-2056. The passcode for the replay is 3190497.

Non-GAAP Financial Information
This release includes a presentation of non-GAAP financial measures. System-wide sales include sales at all clinics, whether operated by the company or by franchisees. While franchised sales are not recorded as revenues by the company, management believes the information is important in understanding the company’s financial performance, because these sales are the basis on which the company calculates and records royalty fees and are indicative of the financial health of the franchisee base. Comp sales include the sales from both company-owned or managed clinics and franchised clinics that in each case have been open at least 13 full months and exclude any clinics that have closed.

EBITDA and Adjusted EBITDA are presented because they are important measures used by management to assess financial performance, as management believes they provide a more transparent view of the company’s underlying operating performance and operating trends. Reconciliation of net income/(loss) to EBITDA and Adjusted EBITDA is presented in the table below. The company defines Adjusted EBITDA as EBITDA before acquisition-related expenses, bargain purchase gain, net gain/(loss) on disposition or impairment, and stock-based compensation expenses. The company defines EBITDA as net income/(loss) before net interest, tax expense, depreciation, and amortization expenses.

EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or cash flows from operations, as determined by accounting principles generally accepted in the United States, or GAAP. While EBITDA and Adjusted EBITDA are used as measures of financial performance and the ability to meet debt service requirements, they are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. EBITDA and Adjusted EBITDA should be reviewed in conjunction with the company’s financial statements filed with the SEC.

Forward-Looking Statements
This press release contains statements about future events and expectations that constitute forward-looking statements. Forward-looking statements are based on our beliefs, assumptions and expectations of industry trends, our future financial and operating performance and our growth plans, taking into account the information currently available to us. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements, and you should not place undue reliance on such statements. Factors that could contribute to these differences include, but are not limited to, the continuing impact of the COVID-19 outbreak on the economy and our operations (including temporary clinic closures, shortened business hours and reduced patient demand), our failure to develop or acquire company-owned or managed clinics as rapidly as we intend, our failure to profitably operate company-owned or managed clinics, and the other factors described in “Risk Factors” in our Annual Report on Form 10-K as filed with the SEC for the year ended December 31, 2019, as updated or revised for any material changes described in any subsequently-filed Quarterly Reports on Form 10-Q or other SEC filings. Words such as, "anticipates," "believes," "continues," "estimates," "expects," "goal," "objectives," "intends," "may," "opportunity," "plans," "potential," "near-term," "long-term," "projections," "assumptions," "projects," "guidance," "forecasts," "outlook," "target," "trends," "should," "could," "would," "will," and similar expressions are intended to identify such forward-looking statements. We qualify any forward-looking statements entirely by these cautionary factors. We assume no obligation to update or revise any forward-looking statements for any reason or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

About The Joint Corp. (NASDAQ: JYNT)
The Joint Corp. (NASDAQ: JYNT) revolutionized access to chiropractic care when it introduced its retail healthcare business model in 2010. Today, the company is making quality care convenient and affordable, while eliminating the need for insurance, for millions of patients seeking pain relief and ongoing wellness. With more than 500 locations nationwide and over 7 million patient visits annually, The Joint is a key leader in the chiropractic industry. Named on Franchise Times “Top 200+ Franchises” and Entrepreneur’s “Franchise 500®” lists, The Joint Chiropractic is an innovative force, where healthcare meets retail. For more information, visit www.thejoint.com. To learn about franchise opportunities, visit www.thejointfranchise.com.

Business Structure
The Joint Corp. is a franchisor of clinics and an operator of clinics in certain states. In Arkansas, California, Colorado, District of Columbia, Florida, Illinois, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Washington, West Virginia and Wyoming, The Joint Corp. and its franchisees provide management services to affiliated professional chiropractic practices.

Media Contact: Margie Wojciechowski, The Joint Corp., margie.wojciechowski@thejoint.com
Investor Contact: Kirsten Chapman, LHA Investor Relations, 415-433-3777, thejoint@lhai.com


-Financial Tables Follow –


 THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES 
 CONDENSED CONSOLIDATED BALANCE SHEETS 
      
  June 30, December 31, 
   2020   2019  
 ASSETS(unaudited)   
 Current assets:    
 Cash and cash equivalents$14,573,266  $8,455,989  
 Restricted cash 235,039   185,888  
 Accounts receivable, net 2,009,480   2,645,085  
 Notes receivable, net - current portion 48,283   128,724  
 Deferred franchise costs - current portion 791,818   765,508  
 Prepaid expenses and other current assets 1,158,267   1,122,478  
   Total current assets 18,816,153   13,303,672  
 Property and equipment, net 8,003,837   6,581,588  
 Operating lease right-of-use asset 12,181,547   12,486,672  
 Deferred franchise costs, net of current portion 3,549,512   3,627,225  
 Intangible assets, net 2,512,057   3,219,791  
 Goodwill 4,150,461   4,150,461  
 Deposits and other assets 394,500   336,258  
  $49,608,067  $43,705,667  
      
 LIABILITIES AND STOCKHOLDERS' EQUITY     
 Current liabilities:    
 Accounts payable$1,456,234  $1,525,838  
 Accrued expenses 629,067   216,814  
 Co-op funds liability 235,039   185,889  
 Payroll liabilities 2,059,602   2,844,107  
 Operating lease liability - current portion 2,700,024   2,313,109  
 Finance lease liability - current portion 68,273   24,253  
 Deferred franchise and regional developer fee revenue - current portion 2,818,607   2,740,954  
 Deferred revenue from company clinics 3,092,574   3,196,664  
 Debt under the Paycheck Protection Program - current portion 1,211,977   -  
 Other current liabilities 565,643   518,686  
   Total current liabilities 14,837,040   13,566,314  
 Operating lease liability - net of current portion 11,484,267   11,901,040  
 Finance lease liability - net of current portion 168,290   34,398  
 Debt under the Credit Agreement and Paycheck Protection Program, net of current portion 3,515,993    
 Deferred franchise and regional developer fee revenue, net of current portion 11,986,489   12,366,322  
 Deferred tax liability 87,107   89,863  
 Other liabilities 27,230   27,230  
   Total liabilities 42,106,416   37,985,167  
 Commitments and contingencies    
 Stockholders' equity:    
 Series A preferred stock, $0.001 par value; 50,000 shares authorized, 0 issued and outstanding, as of June 30, 2020 and December 31, 2019 -   -  
 Common stock, $0.001 par value; 20,000,000 shares authorized, 14,042,854 shares issued and 14,026,841 shares outstanding as of June 30, 2020 and 13,898,694 shares issued and 13,882,932 outstanding as of December 31, 2019 14,043   13,899  
 Additional paid-in capital 40,309,186   39,454,937  
 Treasury stock 16,013 shares as of June 30, 2020 and 15,762 shares as of December 31, 2019, at cost (114,815)  (111,041) 
 Accumulated deficit (32,706,863)  (33,637,395) 
   Total The Joint Corp. stockholders' equity 7,501,551   5,720,400  
 Non-controlling Interest 100   100  
 Total equity 7,501,651   5,720,500  
   Total liabilities and stockholders' equity$49,608,067  $43,705,667  
      



THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(unaudited) 
         
 Three Months Ended Six Months Ended 
 June 30,  June 30,  
  2020   2019   2020   2019  
Revenues:        
Revenues from company-owned or managed clinics$6,856,807  $5,777,288  $14,151,102  $11,416,365  
Royalty fees 3,268,653   3,263,530   6,986,883   6,290,346  
Franchise fees 523,964   447,266   1,036,716   864,339  
Advertising fund revenue 930,795   927,800   1,988,413   1,819,367  
Software fees 631,198   377,125   1,276,922   742,361  
Regional developer fees 213,424   200,524   421,066   384,381  
Other revenues 164,952   176,446   373,177   332,197  
  Total revenues 12,589,793   11,169,979   26,234,279   21,849,356  
Cost of revenues:        
Franchise cost of revenues 1,275,191   1,198,378   2,692,682   2,315,431  
IT cost of revenues 92,450   100,771   161,115   189,659  
  Total cost of revenues 1,367,641   1,299,149   2,853,797   2,505,090  
Selling and marketing expenses 1,783,666   1,769,368   3,838,954   3,275,356  
Depreciation and amortization 693,400   404,466   1,347,649   770,143  
General and administrative expenses 8,541,108   7,227,662   17,235,358   13,780,566  
  Total selling, general and administrative expenses 11,018,174   9,401,496   22,421,961   17,826,065  
Net (gain) loss on disposition or impairment (54,606)  (18,266)  (53,413)  86,927  
Income from operations 258,584   487,600   1,011,934   1,431,274  
         
Other income (expense):        
Bargain purchase gain -   -   -   19,298  
Other expense, net (25,243)  (15,126)  (29,581)  (26,771) 
  Total other expense (25,243)  (15,126)  (29,581)  (7,473) 
         
Income before income tax expense 233,341   472,474   982,353   1,423,801  
         
Income tax expense 117,756   10,214   51,821   8,896  
         
Net income and comprehensive income$115,585  $462,260  $930,532  $1,414,905  
         
Less: income attributable to the non-controlling interest$-  $-  $-  $-  
         
Net income attributable to The Joint Corp. stockholders$115,585  $462,260  $930,532  $1,414,905  
         
Earnings per share:        
Basic earnings per share$0.01  $0.03  $0.07  $0.10  
Diluted earnings per share$0.01  $0.03  $0.06  $0.10  
         
Basic weighted average shares 13,980,984   13,797,497   13,935,829   13,774,474  
Diluted weighted average shares 14,491,639   14,477,007   14,487,083   14,390,319  
         



THE JOINT CORP. AND SUBSIDIARY AND AFFILIATES
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
     
     
  Six Months Ended
  June 30,
   2020   2019 
Net income $930,532  $1,414,905 
Adjustments to reconcile net income to net cash   
  provided by operating activities  1,762,247   1,183,708 
Changes in operating assets and liabilities  343,616   238,167 
Net cash provided by operating activities  3,036,395   2,836,780 
Net cash used in investing activities  (1,905,926)  (2,206,240)
Net cash provided by financing activities  5,035,959   128,940 
Net increase in cash $6,166,428  $759,480 
     



THE JOINT CORP. AND SUBSIDIARY AND AFFILATES
RECONCILIATION FOR GAAP TO NON-GAAP
         
 Three Months Ended Six Months Ended 
 June 30, June 30, 
Non-GAAP Financial Data: 2020   2019   2020   2019  
Net income$115,585  $462,260  $930,532  $1,414,905  
Net interest 25,243   15,126   29,580   26,771  
Depreciation and amortization expense 693,400   404,466   1,347,649   770,143  
Tax expense 117,756   10,214   51,821   8,896  
EBITDA$951,984  $892,066  $2,359,582  $2,220,715  
Stock compensation expense 216,080   178,953   466,473   350,724  
Acquisition related expenses   3,200     3,200  
Bargain purchase gain -   -   -   (19,298) 
Net (gain) loss on disposition or impairment (54,606)  (18,266)  (53,413)  86,927  
Adjusted EBITDA$1,113,458  $1,055,953  $2,772,642  $2,642,268  
         


1
System-wide sales include sales at all clinics, whether operated by the company or by franchisees. While franchised sales are not recorded as revenues by the company, management believes the information is important in understanding the company’s financial performance, because these sales are the basis on which the company calculates and records royalty fees and are indicative of the financial health of the franchisee base. 

2 Comp sales include the sales from both company-owned or managed clinics and franchised clinics that in each case have been open at least 13 full months and exclude any clinics that have closed.

EdgarFiling

Exhibit 99.2

 

© 2020 The Joint Corp. All Rights Reserved. 1 Q2 2020 Financial Results As of June 30, 2020 | Reported on August 6, 2020

 

 

Safe Harbor Statement © 2020 The Joint Corp. All Rights Reserved. 2 Certain statements contained in this presentation are "forward - looking statements." We have tried to identify these forward - look ing statements by using words such as "may," "might," " will," "expect,” "anticipate,'' "'believe,“ "could," " intend," "plan," "estimate," "should," "if,“ "project," and similar expressions. All st ate ments other than statements of historical facts contained in this presentation, including statements regarding our growth strategies, our vision, future operations, future financial position, future revenu e, projected costs, prospects, plans, objectives of management and expected market growth and potential are forward - looking statements. We have based these forward - looking statements on our current expect ations and projections about future events. However, these forward - looking statements are subject to risks, uncertainties, assumptions and other factors that may cause our actual results, perf orm ance or achievements to be materially different from our expectations and projections. Some of these risks, uncertainties and other factors are set forth in this presentation and in other documents that we file w ith the United States Securities and Exchange Commission (the “SEC”), including those described in “Risk Factors” in our Annual Report on Form 10 - K for the year ended December 31, 2019 filed with th e SEC March 6, 2020, as revised or updated for any material changes described in any subsequently - filed Quarterly Reports on Form 10 - Q, including the one we anticipate filing with the SEC on Augus t 7, 2020. These risk factors include, but are not limited to, the continuing impact of the COVID - 19 outbreak on the economy and our operations (including temporary clinic closures, shortened business hours and reduced patient demand) our failure to develop or acquire company - owned or managed clinics as rapidly as we intend, our failure to profitably operate company - owned or managed clinics. Given thes e risks and uncertainties, readers are cautioned not to place undue reliance on our forward - looking statements. Projections and other forward - looking statements included in this presentation have been prepared based on assumptions, which we believe to be reasonable, but not in accordance with U.S. Generally Accepted Accounting Principals (“GAAP”) or any guidelines of the SEC. Actual results may vary, pe rhaps materially. You are strongly cautioned not to place undue reliance on such projections and other forward - looking statements. All subsequent written and oral forward - looking statements attributable u s or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, we disclaim any intention or obligation to upd ate or revise any forward - looking statements, whether as a result of new information, future events or otherwise. Any such forward - looking statements, whether made in this presentation or elsewhere, sh ould be considered in the context of the various disclosures made by us. Business Structure The Joint Corp. is a franchisor of clinics and an operator of clinics in certain states. In Arkansas, California, Colorado, D ist rict of Columbia, Florida, Illinois, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Washi ngt on, West Virginia and Wyoming, The Joint Corp. and its franchisees provide management services to affiliated professional chiropractic practices.

 

 

© 2019 The Joint Corp. All Rights Reserved. 3 BUILD BRAND INCREASE AWARENESS ATTRACT NEW PATIENTS OPEN NEW CLINICS Our Mission is to Improve Quality of Life through Routine and Affordable Chiropractic Care Live a Better You

 

 

Resilient Business Model 4 Q2 2020 vs Q2 2019 Revenue $12.6M up 13% Net Income $116k vs $462k Adjusted EBITDA 2 $1.1M, vs $1.1M Unrestricted cash $14.6 M at June 30, 2020, compared to $8.5M at Dec. 31, 2019 1 Comparable sales include only the sales from clinics that have been open at least 13 or 48 full months and exclude any clinic s t hat have permanently closed, but include clinics that are temporarily closed due to COVID - 19. | 2 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix. © 2020 The Joint Corp. All Rights Reserved. 2% Increase in sy stem - wide sales Q2 2020 over Q2 2019 (6)% Increase in comp sales 1 for all clinics >13 months in operation Q2 2020 over Q2 2019 (10)% Increase in comp sales 1 for all clinics >48 months in operation Q2 2020 over Q2 2019

 

 

12 26 82 175 242 265 309 352 394 453 477 4 47 61 47 48 60 62 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 30-Jun-20 TOTAL CLINICS OPEN Franchise Company Owned/Managed Continued Clinic Growth © 2020 The Joint Corp. All Rights Reserved. 5 370 399 513 539 312 246 Opened greenfields in February, June and July, bringing the corporate portfolio count to 63 as of August 6, 2020 Targeting 1,000 Clinics Opened by the end of 2023 442

 

 

22 RDs Continue Driving Onward 6 1 Of the 876 franchise licenses sold as of June 30, 2020, 209 are in active development, 539 are currently operating and the ba lan ce represents terminated/closed licenses. • 79% of clinics supported by 22 RDs • RDs cover 57% of Metropolitan Statistical Areas (MSAs) in the US Pipeline of 200+ Undeveloped Licenses & LOIs at June 30, 2020 % of Sales by Regional Developers Gross Cumulative Franchise Licenses Sold 1 37 99 126 35 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 June 30, 2020 Franchise Licenses Sold Annually © 2020 The Joint Corp. All Rights Reserved. 49% 89% 89% 80% Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 June 30, 2020 616 715 841 876 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 June 30, 2020

 

 

Chiropractic Care Is an Essential Healthcare Service © 2020 The Joint Corp. All Rights Reserved. 7 • Critical point of differentiation versus other retailer service concepts • Service call for our doctors and staff: Now more than ever, we must be open to treat our patients • Reassuring patients: Our clinics are open and taking the necessary safety precautions Increased frequency of messaging through video and blogs, emails and texts, clinic signage and PR

 

 

Two Major Promotions: Record - Breaking Impact 8 Direct Marketing By end of the promotion, average members per clinic surpassed our all - time record . National Campaign

 

 

Updated Patient Demographics © 2020 The Joint Corp. All Rights Reserved. 9 1 Patients who visited The Joint Chiropractic in 2019 Median Age 37 Years Generation Mix Gen Z 11% Millennial 44% Gen X 30% Baby Boomer 15% Gender Female 49%

 

 

Q2 2020 Financial Results 10 $ in M 1 Q2 2020 Q2 2019 Differences Revenue • Corporate clinics • Franchise fees $12.6 6.9 5.7 $11.2 5.8 5.4 $1.4 1.1 0.3 13% 19% 6% Cost of revenue 1.4 1.3 0.1 5% Sales and marketing 1.8 1.8 0.0 1% Depreciation and amortization 0.7 0.4 0.3 71% G&A 8.5 7.2 1.3 18% Net Income / (Loss) 0.1 0.5 (0.4) (75)% Adj. EBITDA 2 1.1 1.1 0.0 5% 1 Due to rounding, numbers may not add up precisely to the totals. 2 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix. © 2020 The Joint Corp. All Rights Reserved. $14.6M unrestricted cash at June 30, 2020, compared to $8.5M at December 31, 2019.

 

 

Year - to - Date June 30, 2020 Financial Results 11 $ in M 1 H1 2020 H1 2019 Differences Revenue • Corporate clinics • Franchise fees $26.2 14.1 12.1 $21.8 11.4 10.4 $4.4 2.7 1.7 20% 24% 16% Cost of revenue 2.8 2.5 0.3 14% Sales and marketing 3.8 3.3 0.5 17% Depreciation and amortization 1.3 0.8 0.5 75% G&A 17.2 13.9 3.3 24% Net Income / (Loss) 0.9 1.4 (0.5) (34)% Adj. EBITDA 2 2.8 2.6 0.2 5% 1 Due to rounding, numbers may not add up precisely to the totals. 2 Reconciliation of Adjusted EBITDA to GAAP earnings is included in the Appendix. © 2020 The Joint Corp. All Rights Reserved.

 

 

Resilient Business Model Drives Long - term Growth 12 People will continue to seek more noninvasive, holistic ways in which to manage their pain. We will be ready to treat them. System - wide Gross Sales ($ in M) 77% CAGR 1 (2010 - 2019) The Joint Corp. 9 - yr. CAGR 77% 1 vs. Industry CAGR 1.2% 2* 1 For the period ended Dec. 31, 2019 | 2 IBIS World Chiropractors Market Research Report; February 2019 * and 5 - year CAGR © 2020 The Joint Corp. All Rights Reserved. $8.1 $22.3 $46.2 $70.1 $98.6 $126.9 $165.1 $220.3 $60.6 2012 2013 2014 2015 2016 2017 2018 2019 Q1-20

 

 

Non - GAAP Measure Definition 13 This presentation includes a presentation of EBITDA and Adjusted EBITDA, which are non - GAAP financial measures. EBITDA and Adjus ted EBITDA are presented because they are important measures used by management to assess financial performance, as management believes they pr ovide a more transparent view of the Company’s underlying operating performance and operating trends than GAAP measures alone. Reconciliat ion s of net loss to EBITDA and Adjusted EBITDA are presented where applicable. The Company defines EBITDA as net income/(loss) before net interest, tax exp ense, depreciation, and amortization expenses. The Company defines Adjusted EBITDA as EBITDA before acquisition - related expenses, bargain purchase net gain, gain/(loss) on disposition or impairment, and stock - based compensation expenses. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or cash flows from operat ion s, as determined by accounting principles generally accepted in the United States, or GAAP. While EBITDA and Adjusted EBITDA are frequently used as measures of financial performance and the ability to meet debt service requirements, they are not necessarily comparable to other similarly titled cap tions of other companies due to potential inconsistencies in the methods of calculation. EBITDA and Adjusted EBITDA should be reviewed in conjunction with th e Company’s financial statements filed with the SEC. © 2020 The Joint Corp. All Rights Reserved.

 

 

Q2 2020 Segment Results © 2020 The Joint Corp. All Rights Reserved. 14 2020 Q2

 

 

YTD June 30, 2020 Segment Results © 2020 The Joint Corp. All Rights Reserved. 15 2020 H1

 

 

GAAP – Non - GAAP Reconciliation © 2020 The Joint Corp. All Rights Reserved. 16

 

 

Jake Singleton, CFO jake.singleton@thejoint.com The Joint Corp. | 16767 N. Perimeter Dr., Suite 110, Scottsdale, AZ 85260 | (480) 245 - 5960 https://www.facebook.com/thejointchiro @ thejointchiro https://twitter.com/thejointchiro @ thejointchiro https://www.youtube.com/thejointcorp @ thejointcorp Peter D. Holt, President and CEO peter.holt@thejoint.com The Joint Corp. | 16767 N. Perimeter Dr., Suite 110, Scottsdale, AZ 85260 | (480) 245 - 5960 Kirsten Chapman, LHA Investor Relations thejoint@lhai.com LHA Investor Relations | One Market Street, Spear Tower, Suite 3600, San Francisco, CA 94105 | (415) 433 - 3777 17 The Joint Corp. Contact Information © 2020 The Joint Corp. All Rights Reserved.